U.K. Economy Contracts in Q2

GDP decline of 0.7% is most in three years; weather, Jubilee holiday are blamed.

The U.K. economy unexpectedly shrank the most since 2009 in the second quarter as record rainfall and an extra public holiday hurt output, increasing pressure on Prime Minister David Cameron to abandon the government’s biggest budget squeeze since World War II.

Gross domestic product fell 0.7 percent from the first quarter, when it dropped 0.3 percent, the Office for National Statistics said in London today. Economists forecast a 0.2 percent decline, according to the median of 36 estimates in a Bloomberg News survey. Construction plunged 5.2 percent, production fell 1.3 percent and services declined 0.1 percent.

Greater Uncertainty

“The margins of uncertainty of the preliminary estimate are therefore a little bit greater than usual because of these specific and unavoidable uncertainties,” Grice said at a press conference in London. “The scope for future revisions is a little bit greater than normal.”

‘Deep-Rooted’

“We all know the country has deep-rooted economic problems and these disappointing figures confirm that,” Osborne said in a statement released by his office following the data. “We’re dealing with our debts at home and the debt crisis abroad.”

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